This site uses cookies to provide you with a more responsive and personalised service.
By using this site you agree to our use of cookies.
Please read our cookie notice for more information
on the cookies we use and how to delete or block them.

The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Investment Association publishes revised Principles of Remuneration

16 Nov 2015

The Investment Association (IA) has published its revised Principles of Remuneration.

This remuneration guidance sets out its members’ views on the role of shareholders and directors in relation to remuneration and the manner in which remuneration should be determined and structured. The Principles have not been significantly amended and include only one change in relation to long-term incentives.

Additionally the IA has issued a letter to Remuneration Committee chairmen highlighting key aspects of the Principles that its members have asked to be re-emphasised to companies. These include:

Salary increases – Investors continue to be concerned by the level and frequency of salary increases. The letter indicates that salary increases will continue to be an area of scrutiny for members and they will expect to see salary increases being supported with “clear and explicit” rationale; especially those above inflation or in excess of increases provided to the general workforce.

Bonus disclosure - Shareholders require the retrospective disclosure of bonus targets so that they can ensure that there is an appropriate link between pay and performance.

Pensions – There is a concern with the size of pension increases and the complex pension arrangements for Executive Directors. It is expected that pension arrangements should be aligned with those in the rest of the company.